How to Start Investing with Just $5

Getting started in the stock market can feel intimidating. I still remember the first time I logged into my Schwab account. I had a few shares of ExxonMobil that my grandfather had gifted me—he worked there for most of his professional life—and some money in a mutual fund. But when I opened that account, all I saw were confusing symbols and a screen lit up in red and green, like Christmas lights. Then I looked at stock charts that seemed to have no pattern whatsoever and thought, “How could anyone possibly understand this?”

Years later, my curiosity about making passive income led me back to investing. I looked into real estate first, but the barrier to entry was too high for me at the time. Then I discovered a podcast called Investing for Beginners that completely changed my outlook. They made investing sound simple, and I started to dig deeper.

Getting started in the stock market can feel intimidating. I still remember the first time I logged into my Schwab account. I had a few shares of ExxonMobil that my grandfather had gifted me—he worked there for most of his professional life—and some money in a mutual fund. But when I opened that account, all I saw were confusing symbols and a screen lit up in red and green, like Christmas lights. Then I looked at stock charts that seemed to have no pattern whatsoever and thought, “How could anyone possibly understand this?”

Years later, my curiosity about making passive income led me back to investing. I looked into real estate first, but the barrier to entry was too high for me at the time. Then I discovered a podcast called Investing for Beginners that completely changed my outlook. They made investing sound simple, and I started to dig deeper.

That’s when I learned that over the last 100 years, the stock market has averaged around 10% annual returns. If someone were to invest $10,000 and leave it untouched for 30 years, they’d end up with nearly $175,000. That might not make you rich, but with the right strategy and consistency, there’s real potential to build wealth over time.

You Don’t Need Thousands to Start

One of the biggest misconceptions about investing is that you need a lot of money to begin. That’s simply not true. Brokerages like Charles Schwab (which I use), Fidelity, J.P. Morgan, and Merrill Edge all allow you to open an account with no minimum balance. Even better, Schwab and Fidelity let you buy fractional shares—which means you can start investing with as little as five dollars.

Stocks represent partial ownership of a company. When you buy a share, you’re buying a piece of that business, and the value of your investment rises or falls with the company’s performance.

Fidelity also lets you buy fractional shares of exchange-traded funds (ETFs). ETFs are similar to mutual funds in that they both offer instant diversification—they’re like a basket of companies bundled into one investment. But there are some key differences:

• ETFs trade like stocks throughout the day, while mutual funds are only traded at the end of the day.
• ETFs generally have lower expense ratios (fees), making them more cost-effective for many investors.

Both options are great for beginners who want to invest in a diversified, low-maintenance way.

How to Place Your First Investment

Once your brokerage account is set up, you can transfer money directly from your bank. After your funds have cleared, you’re ready to invest. All it takes is placing an order for a stock or fund you want to buy.

There are tons of strategies and investing styles, and the terminology can feel like a foreign language at first. When I bought my first stock, I chose a company I was familiar with—just to rip the Band-Aid off. I also invested a small amount, something I could afford to lose.

Important rule: Never invest money you might need in the next five years. The key is simply getting started. Having a little money in the market makes you more engaged. You’ll naturally start paying more attention to your investments and to what’s happening in the financial world.

Start Simple, Then Explore

For most people, investing in a few well-diversified ETFs is the smartest and easiest way to begin. This “set-it-and-forget-it” strategy requires minimal maintenance—usually just checking once a year to rebalance your portfolio.

But there are some of us, myself included, who want to take it a step further. We’re passionate about picking individual stocks and trying to beat the market. Truthfully, most investors who attempt this fail to outperform the broader market. So why do it?

Because some of us love the process. We enjoy researching businesses, analyzing financials, and trying to find the best companies to own. If that’s you, great—but know that it requires time, discipline, and a willingness to accept risk.

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Final Thoughts

You don’t need thousands of dollars or a finance degree to get started in the stock market. With just $5 and a bit of curiosity, you can begin your investing journey today. Whether you stick with ETFs or dive into individual stocks, the most important step is simply getting started.

That’s when I learned that over the last 100 years, the stock market has averaged around 10% annual returns. If someone were to invest $10,000 and leave it untouched for 30 years, they’d end up with nearly $175,000. That might not make you rich, but with the right strategy and consistency, there’s real potential to build wealth over time. If your looking for the best ETFs to invest in follow my portfolio here.

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